Thanks to the 84th Legislature, Texans have a new, easy way to transfer real property to someone else upon their death. It does not involve going through probate court, which can be a lengthy and costly process. It also allows the owner to keep the exact same rights to the property that they’ve always had while they are alive – they can get the property tax exemption, use it as collateral on a loan, or sell the property as they like.
It works similarly to a life insurance policy or a payable on death bank account because the asset passes directly to the beneficiary named in the transfer on death deed outside the probate system when the owner dies.
While the transfer on death deed is a welcome benefit for all Texans, it brings substantial relief to low-income homeowners. Failure to transfer clear title to property is a significant problem for low-income homeowners. The homes are often informally passed down to a family member, but that person is at risk of losing the home when clear title cannot be shown.
When a natural disaster strikes and a property has been informally handed down through generations, the people living there cannot qualify for FEMA benefits because they cannot show that they are the legal owners. The same is true for property tax exemptions. These homes are often abandoned, causing blight and an invitation to crime to the neighborhood.
Now, people can convey clear title to their property by completing a transfer on death deed form, signing it in front of a notary, and filing it in the deed records office in the county where the property is located before they die at a cost of less than fifty dollars.
The Texas Access to Justice Commission created a do-it-yourself Transfer on Death Deed Kit that includes forms and instructions for completing a transfer-on-death deed as well as a revocation form in the event that someone wants to cancel or change the transfer on death deed, and an affidavit of death that must be filed when the property owner dies. The kit is also available on TexasLawHelp.org.
Frequently Asked Questions
What is a Transfer on Death Deed? A Transfer on Death Deed allows a property owner to transfer their property to one or more people when they die. Unlike a will, a Transfer on Death Deed does not have to go through the expensive probate process. Because of this, a Transfer on Death Deed may be the best way to ensure your property goes to your desired beneficiary when you die.
How does a Transfer on Death Deed work? A property owner fills out a Transfer on Death Deed form listing the legal description of the property and the name of the beneficiary or beneficiaries who will get the property when they die. The Transfer on Death Deed must be filed in the deed records at the county records office of the county where the property is located for it to be effective. When the property owner dies, the beneficiary must file an affidavit of death at the same place. The beneficiary owns the property without having to go through the courts.
How do I complete a Transfer on Death Deed? The Texas Access to Justice Commission has developed a Transfer on Death Deed kit that contains instructions and forms for a Transfer on Death Deed, a Cancellation of a Transfer on Death Deed, and an Affidavit of Death. The kit can be found on the Commission’s website here and on TexasLawHelp.org.
Can I file a Transfer on Death Deed if I own the property with someone else? Yes. If more than one person owns the property, each owner must file a Transfer on Death Deed for the beneficiary to get the entire property. If only one owner files a Transfer on Death Deed, the beneficiary will only get that person’s portion of the property.
What if I have a will? A Transfer on Death Deed trumps a will. Only the beneficiary listed in your Transfer on Death Deed will get your property when you die. If you have a will and leave your property to someone else, that person will not inherit your property when you die, even if your will was created at a later date than the Transfer on Death Deed.
How do I change the beneficiary of a Transfer on Death Deed? If you want to change the beneficiary but have already filed the Transfer on Death Deed as described above, you must either: 1) file a form that cancels your filed Transfer on Death Deed, or 2) file a new Transfer on Death Deed that names a new beneficiary and cancels the previous Transfer on Death Deed. You cannot change the beneficiary of a Transfer on Death Deed by writing a will.
Can I sell the property listed in a Transfer on Death Deed? Yes. A Transfer on Death Deed does not change your rights to your property. You may sell the property, get a mortgage on it, use it as collateral, get property tax exemptions or exercise any other property right you currently have. The Transfer on Death Deed does not take effect until after you die.